Commuters in Paris and London will soon rely on Singapore’s ComfortDelGro to get to work

ComfortDelGro is a relatively late entrant to the mass rapid rail business. Its subsidiary SBS Transit began operating its first rail line, Singapore’s North East Line, an autonomous metro rail line, in mid-2003. SBS Transit’s second line, the country’s Downtown Line, which is also autonomous, has came a decade later.

But now, the company is starting to outbid more established rail operators for global business. ComfortDelGro won the tender to operate the Stockholm subway from Hong Kong’s MTR Corporation, which has been running the Swedish city’s trains since 2009.

The Downtown Line has reached 8.1 million average kilometers before a major failure (MKBF), a common measure for the reliability of rail operations, ComfortDelGro Group CEO Cheng Siak Kian said in an interview in early September. This is much higher than the global benchmark of 1 million MKBF.

“If you compare this standard with other operators, we are way ahead,” Cheng said.

Courtesy of ComfortDelGro

ComfortDelGro’s North-East Line recorded just over 2 million MKBF in 2023. SMRT, the company that operates Singapore’s other metro lines, also broke the 1 million MKBF mark last year on three of its four lines. (SMRT’s fourth line has not yet fully opened)

According to MTR’s latest newsletter, Hong Kong’s subway averaged 2 million kilometers before a major breakdown on eight of its 10 lines. It averaged 8.8 million MKBF for the other two, the East Rail line and the Tuen Ma line that connects the neighboring districts to the city. MTR does not provide an individual breakdown for each line.

“Singapore Experience”

Cheng credits the “Singapore experience”—a mix of tough regulators and discerning consumers—for ComfortDelGro’s rail success.

Singaporeans have long complained about the city’s rail system, which has undergone several major disruptions over the past decade. While reliability has improved, residents were given an unwelcome reminder of how transport can be disrupted last week when several stations on a line operated by SMRT were inoperable for six days due to extensive track damage.

The service was restored to full capacity on Tuesday after extensive repairs to the track and trackside equipment. The damage was caused after a faulty axle box of the train fell onto the tracks, causing part of the train to derail, according to a statement from SMRT. The derailment then damaged tracks and track equipment as the train traveled between stations.

On Wednesday, Singapore’s transport regulator said it would launch an investigation to find the root cause of the disruption. The investigation will likely take several months.

The delays and outages have put operators “under the spotlight”, said Raymond Ong, an associate professor at the National University of Singapore’s civil engineering department, before last week’s outage.

“We’ve all learned from the time we had a lot of breakdowns,” he says. He credits a change in the way Singapore’s government has managed its public transport systems, where regulators have taken charge of infrastructure, allowing operators to focus on reliability and service standards.

This also means that ComfortDelGro cannot lease commercial space in its metro stations because it does not own the real estate. In contrast, Hong Kong’s MTR Corporation generates significant income from real estate, including residential properties and shopping malls built above its subway stations.

ComfortDelGro therefore needs to be cost-effective in its operations if it wants to make money, says Timothy Wong, senior lecturer in transport economics and the National University of Singapore. This cost-cutting experience could make ComfortDelGro an attractive partner in other markets.

What is ComfortDelGro?

ComfortDelGro is a multimodal transport operator that dominates Singapore’s public transport landscape. The company is the city-state’s largest bus operator with a 62% market share and is also the largest taxi operator with a fleet of over 8,700 taxis. It has two of the city-state’s six subway lines, which account for approximately 83 kilometers of rail, and an automated light rail line serving residential neighborhoods.

The company was established in 2003 through a merger between Comfort Group and DelGro Corporation. Both companies started in the 1970s, providing taxi and bus services.

ComfortDelGro had revenue of $2.89 billion last year, ranking it 128th on Of luck Southeast Asia 500.

In addition to Singapore, ComfortDelgro currently operates in 11 other countries. The company runs Metroline, the fourth largest bus operator in London, UK, with nearly 1,300 buses. It is also Australia’s largest bus operator and operates the largest taxi network in the country. And it operates more than 9,000 taxis and private hire cars in nine cities in China.

The company won four contracts worth $532 million to operate four public bus franchises in the UK city of Manchester in March and three bus contracts worth $1.07 billion in Victoria, Australia in September . Operations for both transactions begin in 2025.

But ComfortDelGro is likely to see faster growth in its rail segment.

Courtesy of ComfortDelGro

ComfortDelGro, in a joint venture with French companies RATP Dev and Alstom, won the right to operate part of the Paris metro in July 2023, with passenger service starting in late 2025. The company also operates rail services in Auckland, the most large city in New Zealand.

CEO Cheng expects ComfortDelGro’s global rail network to grow to more than 300 kilometers by the end of 2025, compared to only about 80 kilometers four years ago. ComfortDelGro still has “a few more pieces in the pipeline,” he said, and predicted that overseas markets could soon account for half of the company’s revenue in the near term.

Singapore currently accounts for 57% of ComfortDelGro’s revenue. However, the country’s small size means that ComfortDelGro needs to look overseas if it wants to continue to grow.

“There is a limit to how much you can grow the point-to-point market in Singapore,” Cheng said. “How many more taxis can you put on the road?”